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Walmart Weighs in on Disney-Amazon Dispute While Hachette Dispute Continues

posted on 2014-08-19 22:23 EDT

Retailer Walmart is pricing its Disney and Marvel titles at prices below manufacturer's suggested retail price to attract customers away from Amazon. The online retailer disabled preordering on Captain America: The Winter Soldier, Maleficent, Muppets Most Wanted and other Disney titles due to a contract dispute. Walmart is offering preorders for the titles on DVD and Blu-ray for as much as 50% off the suggested price.

"We kicked off a promotion this week to customers to let them know that we have sought-after Disney titles and the response has been strong, with a 90% increase in combined DVD and Blu-ray sales of Marvel's Captain America: The Winter Soldier, and a 40% increase in sales for other Disney titles," a Walmart spokesperson said.

The Wall Street Journal wrote that the dispute between Amazon and Disney is due to multiple reasons, including promotion, placement on the website, and which company eats the cost when Amazon matches prices with other retailers. Disney wants Amazon to take the cost when it loses money to match other retailers. Similar disputes caused Amazon to pull preorders for on Warner Bros. titles during ongoing contact negotiations, including Viz Media titles. The negotiations were resolved in June.

Barnes & Noble enacted a similar sale when Amazon disabled preorders on Hachette titles, including its manga imprint Yen Press in May.

A group of 900 authors under the name "Authors United" asked readers to contact Amazon CEO Jeff Bezos to rectify the situation with Hachette Books. The company issued a new statement on a website titled "Readers United," referencing Hachette's settlement for colluding to raise e-book prices with other publishers and Apple.

Amazon and Hachette — a big US publisher and part of a $10 billion media conglomerate — are in the middle of a business dispute about e-books. We want lower e-book prices. Hachette does not. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books. E-books can and should be less expensive.

Perhaps channeling Orwell's decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices. So far those parties have paid $166 million in penalties and restitution. Colluding with its competitors to raise prices wasn't only illegal, it was also highly disrespectful to Hachette's readers.

The statement also mentions Amazon's alleged offers to resolve the dispute with Hachette:

We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we "just talk." We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette's normal share of revenue went to a literacy charity. But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.

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